BECHTEL7.jpg 09/04/03--Bagdad, Iraq-- for David Baker Story Bechtel International Systems is currently working on the reconstruction of much of Iraq's infrastructure in the hope of quickly stablilizing the country. Amoung the projects is getting the sewage treatment plants like this one up and running. Wokers in blue suits can be seen at right doing some of the cleaning. JUSTIN LANE FOR THE SAN FRANSISCO CHRONICLE ; on 9/4/03 in Baghdad. Justin Lane / Special To The Chronicle Bechtel's projects in Iraq are focused on restoring the infrastructure, such as this sewage treatment plant in Baghdad. Ran on: 07-04-2004 Workers in Baghdad, left, clean equipment at a sewage plant in Baghdad, above, in a project overseen by Bechtel. As of June 22, only $366 million of the $18.4 billion U.S. package had been spent, the White House budget office says. Nothing from the package has been spent on sanitation or water. Ran on: 07-04-2004 Nothing from the U.S. aid package has been spent on sanitation projects, such as this sewage treatment plant in Baghdad run by Bechtel. MANDATORY CREDIT FOR PHOTOG AND SF CHRONICLE/ -MAGS OUT

Photo: Justin Lane/Special To The Chron

BECHTEL7.jpg 09/04/03--Bagdad, Iraq-- for David Baker Story Bechtel...

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BECHTEL3.jpg 09/04/03--Bagdad, Iraq-- for David Baker Story An Iraqi worker builds a new telephone switching center in Baghdad, while in the background the old Baghdad switching center, whichh was bombed, can be seen. The reconstruction of the phone system, as well as many other reconstruction projects, are being undertaken by Bechtel Internation Systems. JUSTIN LANE FOR THE SAN FRANSISCO CHRONICLE ; on 9/4/03 in Baghdad. Justin Lane / Special To The Chronicle cat MANDATORY CREDIT FOR PHOTOG AND SF CHRONICLE/ -MAGS OUT

Photo: Justin Lane/Special To The Chron

BECHTEL3.jpg 09/04/03--Bagdad, Iraq-- for David Baker Story An...

Little scrutiny for firms in Iraq / S.F.'s Bechtel among most prominent ones

As Bechtel Corp. exits Iraq, we still know little about the quality of the company's work there.

Government reports on Bechtel's Iraq projects often discuss ballooning costs and blown schedules, blaming the costs and delays on security problems. For the most part, you won't see how well the San Francisco engineering company repaired the power and sewage plants under its care or how wisely it spent the $2.3 billion in its contracts.

The same holds true for many of the other engineering and construction companies that have spent the past three years rebuilding Iraq. Some, including Halliburton and Parsons Corp., have seen their projects scrutinized in depth. Others haven't.

That's one of the reasons congressional Democrats want to keep open a federal watchdog office that has issued blunt reports on reconstruction work -- an office some Republicans recently tried to kill. The Special Inspector General for Iraq Reconstruction has provided some of the only detailed analyses of how well U.S. companies in Iraq have done their jobs -- at times uncovering shoddy work and questionable spending.

The inspector's office is working on a slew of audits, including two that would answer questions about how well Bechtel performed. Other reports under way will look at the construction of Iraqi police training facilities, the purchasing of fuel for American troops and the amount of money contractors have spent on guards.

"I absolutely believe that the inspector general should remain in place," said California Sen. Dianne Feinstein. "This inspector general is extraordinarily helpful to the Congress."

Democratic lawmakers will introduce legislation this week to extend the office's lifespan so it can continue its work. They've picked up support among Republican budget hawks who want to see how more than $24 billion devoted to reconstruction has been spent.

Special Inspector General Stuart Bowen Jr. and his team of auditors have established themselves as one of the most reliable sources of information about reconstruction's progress.

There aren't many alternatives. Escalating insurgent attacks and sectarian violence have placed much of Iraq off-limits to Western journalists. Even Iraqi reporters must tread cautiously, limiting their ability to visit reconstruction sites. Iraqis living with busted water mains or broken sewage plants don't have a good way to make those problems known outside their communities.

"That's the problem -- there's no capacity for the Iraqis to report on the results," said author Antonia Juhasz, an anti-globalization activist and frequent Bechtel critic. Someone, she said, needs to make sure companies in Iraq spent their billions in public funding wisely.

Two crucial reports

One of the inspector general's Bechtel reports will provide an audit of spending under the company's reconstruction contracts. The report will probably be released in January.

A second inspector general's report will look at how well Bechtel kept tabs on government property used in Iraq.

So far, there have been few public evaluations of the quality of Bechtel's Iraq work. The special inspector general and the U.S. Agency for International Development have issued several reports looking at Bechtel projects in Iraq, but those reports have been limited in scope. Problems identified in the reports usually involved delays and rising costs that the auditors attributed to lack of security, not sloppy work by the company.

The special inspector general issued a report this summer on an ill-fated children's hospital project in Basra that fell far behind schedule as costs rose. Bechtel executives say the hospital became a target for violence, with 24 workers on the project killed. Construction was halted, and Bechtel was replaced by the U.S. Army Corps of Engineers.

That report contains three brief sentences that question the quality of the work already done on the hospital. The audit cites a Corps of Engineers assessment in March that found "serious cracks" in the concrete already poured for the hospital and said the overall work met "minimum acceptable limits."

The Corps of Engineers declined to provide a copy of the March assessment.

Pressuring subcontractors

Bechtel spokesman Jonathan Marshall said most of the cracks the company found on its own inspections were superficial. Where they appeared to be more serious, the company required its subcontractor to repair them at the subcontractor's expense.

U.S. Agency for International Development reports that have looked at Bechtel's projects are more than a year old and provide an incomplete look at the company's work. They also tend to blame cost and schedule overruns on insurgent violence or other factors deemed to be beyond Bechtel's control.

A June 2005 report on efforts to fix Iraq's rickety electrical system, for example, found that the U.S. government dropped several Bechtel projects to free up money for security operations. Bechtel had spent an estimated $71 million on the projects before they ended.

The same report also detailed one power plant upgrade whose budget soared from $99.1 million to an estimated $174.2 million after months of delays. The problem was that a 600-ton turbine for the plant was stuck in Syria for five months because that country's government wouldn't approve its travel route. The turbine then spent six months in Jordan while workers repaired and shored up bridges along its new route. It finally entered Iraq accompanied by 300 military personnel in a 30-vehicle convoy to protect it from insurgents in the country's volatile western provinces.

The report, however, concluded that these problems were outside the control of both Bechtel and the government and didn't require any corrective action.

Questions raised

News reports questioning the quality of Bechtel's work appeared during one of the first jobs the company tackled in Iraq -- the repair of 1,239 schools during the summer of 2003. Stories identified problems including peeling paint, shorted-out fans and broken toilets at some schools already repaired.

Cliff Mumm, Bechtel's president for infrastructure work, said about 2 percent of the schools needed a second round of repairs. Some suffered from poor materials or workmanship, others from vandalism or looting.

"We maybe put water taps on that were brass, and you'd come back a week later, and they'd be stolen," Mumm said.

Work on the individual schools had been performed by 69 Iraqi subcontracting companies. In cases of sloppy work, Bechtel withheld 10 percent of the subcontractors' pay until the problems were fixed and approved by both Bechtel and the Corps of Engineers. Editor's note: A correction has been made in the above story.